Earnings Estimates Moving Higher for Applied Materials (AMAT): Time to Buy?

Investors might want to bet on Applied Materials (AMAT), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this maker of chipmaking equipment, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.Consensus earnings estimates for the next quarter and full year have moved considerably higher for Applied Materials, as there has been strong agreement among the covering analysts in raising estimates.The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:12 Month EPSCurrent-Quarter Estimate RevisionsThe earnings estimate of $2.55 per share for the current quarter represents a change of +6.7% from the number reported a year ago.Over the last 30 days, the Zacks Consensus Estimate for Applied Materials has increased 17.08% because five estimates have moved higher compared to no negative revisions.Current-Year Estimate RevisionsThe company is expected to earn $10.63 per share for the full year, which represents a change of +12.9% from the prior-year number.The revisions trend for the current year also appears quite promising for Applied Materials, with seven estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 11.21%.Favorable Zacks RankThanks to promising estimate revisions, Applied Materials currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.Bottom LineApplied Materials shares have added 12.9% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Applied Materials, Inc. (AMAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks